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The Things Medicare Doesn’t Cover

Medicare is sometimes referred to as a “single-payer” system; in fact, some experts—such as the New York Times commentator Paul Krugman—have argued that point intensely. Strictly speaking, this isn’t true (apologies to Prof. Krugman). But Medicare does share some traits with single-payer systems. Together, Medicare Parts A and B constitute a “direct payment” program—that is, service providers and facilities are paid directly by the federal government. In that narrow sense, the program resembles some of the “single-payer” systems that people like Krugman have proposed. Ultimately, the debate over whether “traditional” Medicare is a “single-payer” or “direct-payer” plan is less important to consumers than what the program covers.

Traditional Medicare—that is, the combination of Parts A and B—does not cover:

deductibles, coinsurance requirements or copayments when you get health care services (and, as we’ll see below, these can be significant)

outpatient prescription drugs (with only a few exceptions)

monthly premiums for Parts B, C or D

routine or yearly physical exams

custodial care (help with bathing, dressing, toileting, and eating) at home or in a nursing home

dental care and dentures

hearing aids

routine foot care and/or orthopedic shoes

routine eye care and/or glasses

health care you get while traveling outside of the United States (except under limited circumstances)

cosmetic surgery

Medicare Part A, particularly, requires significant out-of-pocket payments from the consumer. According to the main Medicare web site (www.medicare.gov):

Part A pays all covered hospital, skilled nursing facility and home health care benefits for each benefit period except for the deductible. For 2011, the deductible is $1,132 for any hospital stay 60 days long or less. For any hospital stay lasting longer than 60 days, a Medicare co-payment will apply. For stays lasting 61 to 90 days, you will have to pay a Medicare co-payment of $283 per day. For stays of 91 to 150 days, you will have to pay $566 per day. For any hospital stay that lasts longer than 150 days within a single benefit period, you will be required to pay the full cost for each day after the 150th day. For people on Medicare who receive care in a skilled nursing facility, a Medicare co-payment of $141.50 per day will apply to days 21 through 100. Medicare will cover days 1 through 20 in full. You will be required to pay in full any days after the 100th day.

So, a long hospital stay can be expensive—and catastrophically expensive—even with this coverage in place. For most people over 65, all of these exclusions add up to quite a bit of out-of-pocket expense. It’s more than most people—especially those living on fixed incomes—can afford. And this is the reason that traditional Medicare can’t rightly be called a single-payer program; with so much that isn’t covered, someone is paying a significant amount in addition to what’s paid by the Feds.